How to Be a Better Angel, Board Member, and Investor
In business, angels are individuals who invest their own money at the early seed stage, when the risk of failure is very high. They also guide founders and actively help them navigate all sorts of cliffs in building and running an early-stage company.
Members of Boards of Directors and Advisory Boards are often paid professionals, and their companies are usually well established — sometimes for decades — but their role is similar: they guide, they check, they support and unblock the management teams they work with. Since Boards of Directors exist to protect the interests of stockholders, their ultimate interest is the commercial success of their executive teams.
If you’re one of the above — a company owner, a General Counsel, a Venture Capitalist, a Strategic Investor, or a representative of a Family Office — you share that same interest. This piece is about how to act on it earlier than most people do.
Guiding your team to commercial success
In very high-level terms, executives have to
- assemble the team to
- build the product and then
- convince the customers to purchase it.
Maintaining commercial success, once achieved, is often even harder: growth gets harder to find as the base grows, copycats bring new competition, and the larger an organization gets, the less nimble it becomes.
You already know this. You also know that to achieve and maintain 1, 2, and 3, your companies need purpose, focus, and clarity. Everything else flows from that.
Market leadership is a choice, not an accident
Striving to become the leader in a market is good business. This applies across the globe to any variant of market economy, and it holds true even when a product or service is fundamentally altruistic.
What’s important to understand is that market leadership is not something that happens by chance. You can choose to pursue it, and frameworks such as category design — also called category creation — help you get there. We prefer “design” because it hints at the intentionality of the process.
The iPod, Uber, and Netflix are the well-known consumer examples. But the pattern shows up wherever someone names a problem before their competitors do and gets the market to adopt that name.
For the results they produce, these projects are surprisingly lean: a full-scale category design engagement usually runs three to six months for research and strategy, followed by marketing and communications phases of varying duration depending on the market. Even stripped-down versions produce the purpose, focus, and clarity that so many companies need.
What the company ends up with
A foundational, whole-company strategy that sets everyone on the path to market leadership — and a Point of View document that articulates why employees and customers alike should be excited about the company and its products. That document is what helps attract the right employees, who build the products the customers crave.
Commercial success usually shows up quickly, well before the company reaches market leadership.
What to listen for
Category design as a formal practice has been around for years, but most managers don’t have it front of mind. They won’t ask you for an introduction to a category design firm, because it won’t occur to them that such a thing exists.
So listen for the symptom instead of waiting for the request:
- When they say “we need a new slogan,” think category design.
- When they’re looking for help renaming, think category design.
- When they mention rebranding or a new logo, think category design.
- When they contemplate a pivot, think category design.
- When they see their growth flatten, think category design.
- When they see their decades-long profits erode, think category design.
Any signal that says “what we’ve been doing isn’t working anymore” is the moment to suggest an assessment. Good category designers will tell you when they can’t help, and point you toward other options — an ad agency, or another form of management consulting.
The right way, and a wrong way
The right way to start is to work with people who have done it before. That could be freelancers, very large consulting firms, or specialized boutiques.
The key isn’t only their experience with the process. It’s their outside view into the company — the questions they’ll ask. You know the ones: so obvious that nobody inside asks them anymore.
The wrong way is to convene an internal team led by someone who read a few books on the subject and attended a seminar on change management. We know of painfully numerous examples where executives thought they could do this in-house. One CEO was advised by their board to “save the consulting fees.” Another company told our sales team that “bringing in consultants will slow us down.” In each case, after more than a year, they produced results that immediately fizzled out. Time and money wasted.
If you’re hearing any of the signals above from a company you’re backing, that’s the moment to act — not the quarter after. Let’s talk about what you’re seeing.